On September 24, the court in the underlying action entered the following
order:

"(3) [The Court] GRANTS [Freeman's] Motion to Dismiss filed on
September 12, 1997, and DISMISSES all claims filed by [Freeman] against
[Portland Trailer] subject to the conditions

"(a) that such dismissal is without prejudice;

"(b) that each party shall bear its own attorney's fees to the extent
such fees were incurred in connection with [Freeman's] claims against
Portland Trailer * * *;

"(c) that should [Freeman] refile any of the claims set forth in the
first amended complaint against Portland Trailer, * * * [Freeman] shall pay,
as a prerequisite to litigating any such claim against a defendant, all
reasonable attorney's fees incurred by that defendant in the instant litigation;
and

Pursuant to paragraph (d) of that order, Freeman tendered to Portland Trailer payment of
the latter's costs associated with defending against the underlying action. There is no
evidence in the record that Freeman has refiled its claims against Portland Trailer.

In 1998, Portland Trailer filed this action for wrongful initiation of a civil
proceeding against Freeman and Robertson. The trial court granted Freeman's and
Robertson's motions to dismiss for lack of personal jurisdiction. Portland Trailer
appealed, and we reversed and remanded. Portland Trailer & Equipment v. A-1 Freeman
Moving, 166 Or App 651, 5 P3d 604, modified on recons 168 Or App 654, 4 P3d 741
(2000). On remand, all parties moved for summary judgment. The only issue before the
trial court on summary judgment was whether the underlying action was terminated in
favor of Portland Trailer. The trial court granted Freeman's and Robertson's motions for
summary judgment "on the ground that the pleadings, exhibits and affidavits on file show
that as a matter of law the underlying action was not terminated in [Portland Trailer's]
favor." This appeal followed.

See alsoWroten v. Lenske, 114 Or App 305, 308, 835 P2d 931, rev den 314 Or 574
(1992). The requirement that the underlying proceeding was terminated in the plaintiff's
favor is an element of a wrongful initiation of civil proceedings action under Oklahoma
law as well. Glasgow v. Fox, 757 P2d 836, 838 (Okla 1988).

The only question before us is whether the underlying action was
terminated in Portland Trailer's favor as a matter of law. Because the answer to that
question may depend on whether we apply Oklahoma or Oregon law, we first determine
which forum's substantive law applies. At the first step of analysis, we determine whether
there is a material difference between Oregon substantive law and the law of Oklahoma.
If there is no material difference, there is a "false conflict," and Oregon law governs.
Erwin v. Thomas, 264 Or 454, 457-62, 506 P2d 494 (1973); Angelini v. Delaney, 156 Or
App 293, 300, 966 P2d 223 (1998), rev den 328 Or 594 (1999).

Controlling decisional authority clearly establishes that Portland Trailer was
not a prevailing party in the underlying action under Oklahoma law, because that action
was dismissed without prejudice.

"For there to be a prevailing party in an action requires that the
underlying proceeding not have been dismissed without prejudice.
Dismissal without prejudice is not a termination favorable to the malicious-prosecution plaintiff. To hold differently would be to countenance the
possibility of countervailing results arising from the same action."
Greenberg v. Wolfberg, 890 P2d 895, 904 (Okla 1995) (some emphasis
added; some emphasis in original).

Despite the holding in Greenberg, Portland Trailer argues that it was the prevailing party
under Oklahoma law because, although Freeman could refile its claim in a successive
action, conditions were placed upon refiling that made it unlikely that Freeman would do
so. According to Portland Trailer, Freeman was not in the same position it occupied
before it filed the initial action because, as a condition of the dismissal, Freeman would
have to pay Portland Trailer's attorney fees before refiling. That reasoning, however,
ignores the rationale of Greenberg: a dismissal without prejudice is not a termination in
favor of the defendant because, if it were, it would leave open the possibility of
inconsistent results should the plaintiff prevail in a successive action on the same claim.
Here, conditions notwithstanding, Freeman retained the right to refile its claim against
Portland Trailer, and there remains the possibility that Freeman could prevail on that
claim in another action. Accordingly, the underlying action was not terminated in
Portland Trailer's favor under Oklahoma law.

Oregon law follows a different rule under which the circumstances
surrounding a voluntary dismissal dictate whether the underlying action terminated in
favor of the defendant. Several decisions illustrate the rule.

In Rose (Betty), v. Whitbeck, 277 Or 791, 562 P2d 188, modified on other
grounds 278 Or 463, 564 P2d 671 (1977), the plaintiff sued the defendants for malicious
prosecution after a criminal indictment, instigated by the defendants, was dismissed by
the prosecutor. The indictment had charged the plaintiff with forgery in obtaining title to
her deceased father's automobile. Before his death, the plaintiff's father had given the car
to the plaintiff and had asked the plaintiff to sign his deceased wife's name to the title to
effectuate the transfer. The defendants--siblings and inlaws of the plaintiff--requested
that law enforcement officials investigate the transfer of title of the vehicle. As a result of
that investigation, the plaintiff was indicted for forgery. After the indictment was filed,
but before trial, the probate court administering the plaintiff's father's estate determined
that the vehicle was a gift to the plaintiff. In view of that adverse determination of an
"issue critical to the state's case against [the plaintiff], the district attorney moved that the
indictment against [her] be dismissed." Id. at 794. The plaintiff then filed an action
against the defendants for malicious prosecution, and a judgment was entered on a jury
verdict in favor of the plaintiff. Id. at 793. On appeal, the Supreme Court concluded that
the trial court did not err in denying a motion for directed verdict, because the
prosecutor's voluntary dismissal of the indictment constituted sufficient evidence to
support the jury's finding that the underlying criminal action terminated in the plaintiff's
favor. The court explained:

"Dismissal of an indictment at the request of the district attorney is
generally sufficient to satisfy the requirement that the criminal proceeding
has terminated in the favor of the plaintiff. Gumm v. Heider, 220 Or 5, 25,
348 P2d 455 (1960); 3 Restatement of Torts § 659 (1938). An exception is
made, however, where the dismissal was pursuant to an agreement of
compromise by the plaintiff. Gowin v. Heider, 237 Or 266, 279, 386 P2d 1,
391 P2d 630 (1964); 3 Restatement of Torts § 660 (1938). In such cases the
dismissal is not indicative of innocence." Id. at 798-99.

In discussing the favorable termination requirement, the Supreme Court
said:

"A termination of the prosecution favorable to the accused is
essential to recovery by the plaintiff in an action for malicious prosecution.
If such termination is indicative of the innocence of the defendant, it is
immaterial that a new prosecution might have been commenced provided it
was not in fact commenced before the trial of the civil action." Id. at 21
(citation omitted).

The court concluded that there are two rules applicable to the favorable termination
requirement:

"The first one is that where a criminal proceeding has been terminated in
favor of the accused by judicial action * * * in any way involving the merits
or propriety of the proceeding or by a dismissal or discontinuance based on
some act chargeable to the complainant as his consent or his withdrawal or
abandonment of his prosecution, a foundation in this respect has been laid
for an action of malicious prosecution. The other and reverse rule is that
where the proceeding has been terminated without regard to its merits or
propriety by agreement or settlement of the parties or solely by the
procurement of the accused as a matter of favor or as the result of some act,
trick, or device preventing action and consideration by the court, there is no
such termination as may be availed of for the purpose of such an action."
Id. at 23-24.

Applying those rules, the court in Gumm observed that "it [was] undisputed that the
district attorney had abandoned the prosecution," id. at 25, and "was of the opinion that
the facts did not justify the indictment." Id. at 24. The court concluded that, because
there was sufficient evidence for the jury to find that the dismissal was "indicative of the
innocence" of the plaintiff and, therefore, was based on the merits of the underlying
action, the trial court did not err in denying the defendant's motion for a directed verdict. Shaw v. Moon et al., 117 Or 558, 245 P 318 (1926), was an action for
malicious prosecution brought against a justice of the peace and the person who procured
the issuance of a search warrant against the plaintiff. According to the complaint, upon
the execution of the warrant, the plaintiff's property was seized and held by the district
attorney's office. Id. at 560-61. The complaint further alleged that the district attorney
had failed to take further action on the matter despite the passage of a significant period
of time. Id. at 561. The trial court granted the defendant's motion to dismiss the
complaint for failure to state a claim for malicious prosecution. The Supreme Court
reversed, concluding that the plaintiff's complaint was sufficient to state a claim.
Although the question of whether the underlying prosecution terminated in favor of the
plaintiff was not before the court, it stated, in dictum, that "[a]n abandonment of such a
proceeding so far as plaintiff's right to prevail is concerned, is equivalent to a successful
termination thereof." Id. at 565. The court in Shaw held that the complaint was sufficient
to withstand a motion to dismiss for failure to state a claim, even though there was no
allegation that the abandonment of the prosecution would preclude a later prosecution of
the plaintiff on the same charge.

Parks v. Willis, 121 Or App 72, 853 P2d 1336 (1993), a wrongful initiation
of civil proceedings action, also informs our analysis. In Parks, the plaintiff appealed
from a judgment dismissing the action on the ground that the complaint failed to state a
claim for relief. See ORCP 21 A(8). The complaint did not specifically allege that the
underlying action had been successfully terminated in the plaintiff's favor; instead, it
alleged that the underlying action was dismissed on stipulation but did not specify
whether the dismissal was with, or without, prejudice. On appeal we held, as the court
did in Shaw, that the allegation was sufficient to state a claim, despite the plaintiff's
failure to specify the nature of the dismissal.

"Civil proceedings may be terminated in favor of the person against
whom they are brought under the rule stated in Clause (b), by (1) the
favorable adjudication of the claim by a competent tribunal, or (2) the
withdrawal of the proceedings by the person bringing them, or (3) the
dismissal of the proceedings because of his failure to prosecute them. * * *

"Whether a withdrawal or an abandonment constitutes a final
termination of the case in favor of the person against whom the proceedings
are brought and whether the withdrawal is evidence of a lack of probable
cause for their initiation, depends upon the circumstances under which the
proceedings are withdrawn."

If the action was voluntarily terminated by the plaintiff, a finder of fact might determine
that the termination was an admission that the claim lacked merit. However, the
abandonment also might reflect financial impecunity or a determination that the potential
recovery did not justify the cost of litigation. Because any number of factual explanations
might be at the root of a voluntary dismissal, the question often is not well-suited for
resolution on a summary judgment record. That is the case here.

"(2) * * * the factors relevant to the choice of the applicable rule of law
include

"(a) the needs of the interstate and international systems,

"(b) the relevant policies of the forum,

"(c) the relevant policies of other interested states and the relative
interests of those states in the determination of the particular
issue,

"(d) the protection of justified expectations,

"(e) the basic policies underlying the particular field of law,

"(f) certainty, predictability and uniformity of result, and

"(g) ease in the determination and application of the law to be
applied."

Section 145(2) identifies the contacts to be taken into account when applying the factors
in section 6:

"(a) the place where the injury occurred,

"(b) the place where the conduct causing the injury occurred,

"(c) the domicil[e], residence, nationality, place of incorporation
and place of business of the parties, and

"(d) the place where the relationship, if any, between the parties is
centered." Restatement (Second) of Conflicts § 145(2) (1971).

Although not formally adopted by the Oregon Supreme Court, the
Restatement sets forth a conflicts rule embodying the foregoing principles that is
specifically applicable to malicious prosecution and civil abuse of process cases.
Restatement (Second) of Conflicts § 155 (1971) provides:

"The rights and liabilities of the parties for malicious prosecution or abuse
of process are determined by the local law of the state where the proceeding
complained of occurred, unless, with respect to the particular issue, some
other state has a more significant relationship under the principles stated in
§ 6 to the occurrence and the parties, in which event the local law of the
other state will be applied."

1. Wrongful initiation of a civil proceeding is the civil counterpart to an action
for malicious prosecution arising out of a criminal proceeding. Kelly v. McBarron, 258
Or 149, 153, 482 P2d 187 (1971). Because the two causes of action are so similar,
authorities often use the terms and their legal analyses interchangeably. Checkley v.
Boyd, 170 Or App 721, 736, 14 P3d 81 (2000), rev den 330 Or 239 (2001).

"When a person has been held to answer for a crime, if an indictment
is not found against him at the next term of the court at which he is held to
answer, the court shall order the prosecution to be dismissed, unless good
cause to the contrary is shown."

5. Relying on Shaw, Portland Trailer asserts that the reason for Freeman's
dismissal of the underlying action is unimportant; it only matters that it abandoned its
claims. We disagree for two reasons. First, as the later decisions in Gumm and Rose
make clear, a voluntary dismissal constitutes a favorable termination only if it reflects on
the merits of the underlying claim. The dictum in Shaw did not capture that caveat.
Second, it is unclear from the published decision in Shaw exactly what had been
"abandoned." The criminal prosecution may have been dismissed because, as in Gumm
and Rose, the prosecutor had determined that the charge lacked merit. At the pleading
stage, the issue simply had not been tested by the evidence.

"One who takes an active part in the initiation, continuation or procurement
of civil proceedings against another is subject to liability to the other for
wrongful civil proceedings if

"(a) he acts without probable cause, and primarily for a purpose
other than that of securing the proper adjudication of the claim in which the
proceedings are based, and

"(b) except when they are ex parte, the proceedings have terminated
in favor of the person against whom they are brought."

Although section 674 is not binding on us, Oregon courts have long considered it, along
with its comments, to be an instructive authority in this area. See, e.g., Rose, 277 Or at
798-99 (applying a previous version of the Restatement of Torts in analyzing a malicious
prosecution action); Wroten, 114 Or App at 309 (applying Restatement (Second) of Torts,
including comments, to an action for wrongful initiation of a civil proceeding).

7. Specifically, if Oklahoma law applies, the trial court properly entered
summary judgment in favor of Robertson. However, if Oregon law applies, summary
judgment would not be appropriate, and the proper disposition would be reversal and
remand of the case for trial.

8. Our review of the law in other jurisdictions discloses consistent agreement
with this principle. See, e.g., In re American Continental Lincoln S&L Sec. Lit., 845 F
Supp1377, 1383-85 (D Az 1993) (applying Restatement (Second) of Conflicts section
155in interstate commercial litigation to determine that the substantive malicious
prosecution law of forum state in underlying litigation governs, although none of the
parties was a resident of, or domiciled, in that state); Denenberg v. Am. Family Corp. of
Columbus, Ga., 566 F Supp 1242, 1247-49 (ED Pa 1983) (where underlying action was
litigated in New York and malicious prosecution action was brought in Pennsylvania,
New York had the greater interest "in regulating the use of its process and in determining
when its judicial system is maliciously used, especially if one of the defendants is an
attorney licensed to practice there").

9. The fact that the underlying action was litigated in Oklahoma's federal court
does not alter the analysis. The substantive law of Oklahoma governs the wrongful
initiation of civil actions in that state's federal courts where the court's jurisdiction is
based on diversity of citizenship. See Lothschuetz v. Carpenter, 898 F2d 1200, 1203 (6th
Cir 1990) (applying District of Columbia malicious prosecution law where the
defendants' conduct occurred before federal agencies in Washington, D.C.).